According to conventional indifference curve diagrams, when deciding between two goods – say, food and clothing – it is as though we’ve never consumed them before. Thus, we are assumed to come to the problem in a pristine state, without indicating the amount of the goods in question we consumed in the prior period or are adapted to. However, this is contradictory, because if we have not consumed these items before, how are we supposed to know how much utility we should expect from them?

Hence, the customary indifference curve depends on the implicit assumption that choices along indifference curves are reversible. That is, if an individual owns x and is indifferent between keeping it and trading it for y, then when owning y the individual should be indifferent about trading it for x. If loss aversion is present, however, this reversibility will no longer hold (Knetsch 1989, Kahneman et al. 1991). Knetsch and Sinden (1984) were the first to point out that the standard assumption pertaining to the equivalence of losses and gains is contradicted by the experimental evidence.

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In sum, behavioural indifference curves are relative to a reference point. The endowment effect implies that people are willing to give up an object only at a higher price than the price at which they are willing to buy it, i.e. it is psychologically more difficult to give up an object than to acquire it. This changes the shape and properties of the indifference map, which has far-reaching implications not only in classrooms, but also in applied areas such as the evaluation of welfare states and the stickiness of economic variables such as wages, prices, and interest rates (Knetsch et al. 2012). This salient issue ought no longer to be ignored, and needs a much wider research agenda than hitherto allotted to it at the margins of the discipline.

Even at this stage it is important to incorporate behavioural indifference curves into the curriculum and stop teaching outdated concepts. If you think that behavioural indifference curves would be too complicated for beginners then I would urge you not to teach the conventional ones until the students are ready for the current version, because one should not mislead students by teaching inappropriate concepts. If the straight-talking Nobel-prize-winning physicist Richard Feynman (1918–1988) were still with us, he would concur with this view. In his famous 1974 commencement address at the California Institute of Technology, he beseeched the graduating class to practice scientific integrity, utter honesty, and to lean over backwards so as not to fool themselves (and of course others) (Feynman 1985). I believe that the same is true for us – teachers of economics, it is time to start leaning over backwards and to stop teaching the standard indifference curves.

Football might be the world’s most popular sport, but moaning about co-commentators runs it a close second: so far, Clarke Carlisle, Andy Townsend and Phil Neville have all trended on Twitter and not in a good way.

One reason – or at least justification – for this contumely is that their judgments are often clouded by numerous cognitive biases; I’ve long suspected that Daniel Kahneman could have re-written Thinking Fast and Slow by taking examples solely from football punditry.

Here is an (incomplete) inventory of these biases:

1. Hindsight bias. How often after a player shoots wide, does Andy Townsend say he could have passed instead? It’s easy to know the right thing to do when you’ve seen what went wrong. This is especially true when discussing defences. Pointing out that the defensive shape was wrong after it conceded a goal is not good enough; the question is: did that same shape prevent many other goals? Americans call this Monday morning quarterbacking: it’s a shame there’s no English equivalent.

2. Outcome bias. Results shape our perceptions of performance. For example the Netherlands’ 5-1 defeat of Spain looks like a tonking. But their third goal might have been disallowed; their fourth was due to an unusually bad goalkeeping error and their fifth caught a demoralized side on the break. It’s a cliche – because it’s true – that football is a game of small margins, but if those margins all drop in your favour you can achieve a great result without a proportionately superior performance.

3. Misperceiving randomness. There’s always one team at a World Cup that does surprisingly well. This, though, is only to be expected. A lot of teams have a small but reasonable chance of getting to, say, the quarter-final. Across 32 teams, one of those chances is likely to turn up – just as we are likely to win a prize if we buy enough lottery tickets.

4. The hot-hand fallacy. This is a tendency to see “form” where none really exists but merely a run of luck. Take, for example, a player who scores a goal every other game – roughly Suarez’s and van Persie’s record but less that Dzeko’s. Over a 50-game career, such a player has a 50-50 chance of scoring six goals in six games. Such a run could well be enough to win him a golden boot and legendary status. A variation of this fallacy is the “commentator’s curse” – when a commentator praises a player only to see him shank a pass horribly. What happens in such cases is that an in-game run of luck suddenly stops.

5. Bayesian conservatism. Once we’ve got an idea that a team or player is rubbish, we interpret evidence to back up this idea; this is seen in co-commentators repeating themselves. My prior is that Diego Costa is a nasty cheating traitor who will therefore fit in well at Chelsea; I doubt this will change.

6. Selective perception. This is closely related to conservatism. It’s our tendency to notice evidence that supports our priors more than evidence that contradicts it. So if we have an idea that someone is a good player, we’ll spot his good points more than his bad; this is especially likely because so much of what players do (or don’t do) happens when they don’t have the ball; do they make good runs, or track back well?

7. Over-reaction. For example, Uruguay looked poor last night. Is this because they are a genuinely mediocre side (as their qualifying recordsuggests) or is it because they had an off-day? We can’t tell for sure on the basis of 90 minutes. If we do so, we might well be over-reacting.

8. Overconfidence. Everyone thinks their opinions on football are the correct ones, in part because we underweight our vulnerablity to all of the above; this is the Dunning-Kruger effect. One example of this is that many of us are backing Brazil to win the cup. But in fact, although they are favourites the smart money thinks there’s a 75% chance they won’t win.

Of course, cognitive biases aren’t necessarily wrong; indeed, they persist precisely because they sometimes (often) lead us to the right conclusion. And sometimes, they can cancel out; for example, Bayesian conservatism offsets over-reaction. My point is merely that one reason why pundits so often annoy us is that they are prone to such biases – and, of course, we are morely likely to see such biases in others than in ourselves.

We are able to observe people before and after a win. Access to longitudinal information gives us advantages denied to most previous researchers on this topic. One reason this is important is because it seems plausible that personality might determine both the number of lottery tickets bought and the political attitudes of the person, and this might thereby lead to a possible spurious association between winning and right-leaning views. We provide, among other kinds of evidence, a simple graphical demonstration that winners disproportionately lean to the right having previously not been right-wing supporters.

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The consequences of winning even a modest sum of money are fairly large – certainly a number of percentage points extra on your chances of favouring a Mrs Thatcher or a Ronald Regan. Thus money makes people right-wing and inegalitarian. Perhaps even you.

Our econometric analysis implies that long-term GDP growth is certainly desirable among poorer countries, but is it a desirable feature among developed countries as well? Recent evidence shows the negative effect of high aspiration can also be rationally predicted by individuals who, nevertheless, may still choose options that may not seem to maximise happiness, but which are compatible with high-income aspirations.

This implies that individuals may still prefer to live in richer countries, even if this would result in a decreased level of life satisfaction. In other words, the fact that individuals aspire to a higher income may not be considered – from an individual perspective – a negative feature of an economy even if this might result in a lower level of reported life satisfaction among the richest countries.